US companies holding on to record levels of cash

[ASusilovic]

US companies are becoming increasingly risk-averse with their investments, holding on to record levels of cash as a buffer against turmoil in financial markets, according to a survey of chief financial officers and corporate treasurers.

Corporate America’s increased caution with its investments will make it more difficult for banks and hedge funds to restore normality to troubled markets such as the one for asset-backed commercial paper (ABCP).

http://www.ft.com/cms/s/16a3038e-83...c.html&_i_referer=http://ftalphaville.ft.com/

Very good ! Fear is the best prerequiste for the next stock rally !

 

[nazzdack]

The irony would be that announcements of stock buy-backs would be bearish. We'll see.

 

[gwb-trading]

One of the concerns is that many of the assets marked as cash and equivalents by corporate America may effectively be worthless. If the liquidity crisis continues then corporations may have to re-state the value of their cash equivalents as the derivative instruments being held incur losses? The following post explores the issues.

How toxic are your corporate cash equivalents?
http://hingefire.blogspot.com/2007/08/how-toxic-are-your-corporate-cash.html

 

[Daal]

Quote from nazzdack:

The irony would be that announcements of stock buy-backs would be bearish. We'll see.

your talking about a downturn in capex?

 

[Renegen]

Whatever happened to buying bonds when you needed to put your cash at work?